While the SYRIZA-led Greek government celebrates its latest “success story” and claims that the Greek economy is on the upswing and about to exit the memorandum agreements, reality on the ground tells a different story.
According to a new study by Panteion University professor Savvas Rompolis, a new wave of crippling poverty and unemployment is in store for Greece beginning in 2019.
Today, 48 percent of the Greek population, some 5.1 million people, are said to live under the poverty level of €382 per month. Included in this are 1.5 million Greeks who live in conditions of extreme poverty, with an income of less than €182 per month.
Despite these sobering figures, Rompolis’ study foresees a new and dramatic increase in poverty in Greece beginning in 2019. With new cuts slated for 2019-2020, the average pension will drop from the current €722 per month to €480 per month, while a planned decrease in the tax-free threshold slated for 2020 will further decrease the average monthly pension to €450.
According to government data, one in three pensions at the present time does not surpass €500 per month. Pensions in Greece have been hammered by the “radical leftist” SYRIZA government’s so-called “Katrougalos Law,” which delivered 22 cuts to pensions which had already been battered by the two initial memorandum agreements and austerity cuts of the previous PASOK and New Democracy governments.
The aforementioned law is named after current alternate foreign minister and former social insurance minister Giorgos Katrougalos, a “constitutional law expert” and one-time activist who had participated in the “protests” of the “Indignants” in Syntagma Square in Athens, including in an infamous roundtable discussion with “radical” (but pro-austerity) economist Yanis Varoufakis, the “Marxist” current non-elected finance minister Euclid Tsakalotos, and supposed “pro-Grexit” crusader Dimitris Kazakis. At that time, Katrougalos decried the austerity being imposed on the Greek people. Once in government, he imposed it and deepened it.
Cuts of 18 percent in the so-called “personal difference” (the gap between the pension amount as calculated with the old and new system) are slated to be enacted in December 2018, while pension increases have been postponed until 2023 at the earliest and will be indexed to the growth rate and to the “personal difference.” In other words, a real increase in the amount a pensioner receives will not take place until the full amount of the “personal difference” is eliminated. If the pensioner happens to pass away before this takes place, tough luck!
In all, the Katrougalos cuts are slated to lead to pensions that are 40 to 50 percent lower than the already-battered pension amounts of 2014.
Also foreseen in the coming years is an increase in the working population that will nevertheless find itself living below the poverty level. Those who will be employed in “flexible” labor schemes are expected to receive monthly wages of €200 to €300 on average, less than the annual poverty rate of €4,150.
As for Greece’s supposedly declining unemployment rate? It looks like another myth. One previous full-time position is now being shared among 2-3 part-time workers. It is said that today, one in three salary earners in Greece are employed on a part-time basis.
At the same time, the working population, as of January 1, has faced an additional 1.5 percent decrease in their wages as a result of an increase in tax withholdings, while in 2020, a further decrease in wages is expected, as the tax-free annual income threshold will be further reduced, to €5,700.
This new generation of poverty-level workers, earning an average of €327, has grown significantly under the “radical leftist” SYRIZA-led government, and it bears noting that this average monthly income is less than the already-paltry unemployment benefit of €360.
In all, yet another “success story” for the “anti-austerity government of the people.” A success story of crippling unemployment, poverty, and hunger. But of course, Greece still has the euro…
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.